AMD Stock Price Up 7% After CEO Sets Ambitious Target

Shares of Advanced Micro Devices (AMD) (NASDAQ:AMD) closed the week nearly 7% higher as the price recovers from the coronavirus selloff. Moreover, the company’s CEO said it expects the company to achieve revenue growth of 20% over the next four years.

Fundamental analysis: Ambitious target set

Lisa Su, CEO of AMD, believes that the company can generate higher revenues as well as higher profits in the coming years on the back of reduced production costs. She expects AMD’s revenue to rise at a long-term compound annual growth rate of 20%.

The company previously communicated that it expects revenue in the range of $1.75 billion and $1.85 billion for the first quarter. Su said gross margins are expected to rise above 50%, while sales are expected to rise between 28% and 30% this year.

Following Su’s remarks, Atlantic Equities analyst increased AMD stock price target to $60 from $37 due to “significant cost advantage in manufacturing”.

On the other hand, Morgan Stanley analyst believes that the projected growth may have been priced in already.

Su also said that AMD faces disruptions in the supply chain amid the coronavirus outbreak, although things are almost back to normal. The company previously said it expects “a modest impact” from the coronavirus.

Technical analysis: Supports provides a base for a move higher

Similarly to some other stocks, AMD stock price recorded an all-time high just days before the market corrected lower amid the coronavirus outbreak. Shares lost around 30% of the value in a week’s time, before recovering around half of the losses.

The target on the upside remains the recent record high just below the $60 mark, while the former resistance around the $41 handle has already provided a support to stock price. If the market recovers from coronavirus-related fears, we may see AMD stock progressing higher to test new highs.

Summary

Shares of AMD closed the week 7% higher as the stock price recovers from the recent market selloff. The stock has been supported by bullish claims from the company’s CEO on revenue growth, which also prompted some analysts to increase the target price.